Crypto Update: Range Trading Continues as Volatility Collapses

Trading activity has been very light in the cryptocurrency segment in the past 48 hours, with the Easter weekend affecting volumes and volatility. The major coins continue to trade in narrow ranges, with the general relative strength setup being unchanged as well. Bitcoin is still showing encouraging short-term stability and sings of buying pressure, but the top altcoins haven’t shown sustained strength despite the several rally attempts.

On a positive note, all of the majors are clearly holding up above this week’s key support levels and although the previous recovery highs haven’t been broken, the broad counter-trend move is not dead yet. Bulls would need more coins to pull their weight, and given the still negative long-term technicals, traders should still stay away from entering new positions here, despite the stability in the segment, with long-term downside risks still being high.

The likes of EOS, Litecoin, and Ethereum will likely dominate the trends of the coming period, and should they show relative strength, another upswing is possible, even in the face of the negative long-term pressures.

BTC/USD, 4-Hour Chart Analysis

Bitcoin continues to drift higher in the quiet environment, getting ever closer to its previous swing high near the $5400 price level. The coin is still among the strongest majors from a short-term perspective, and a move above the swing high would likely lead to a tradable rally and a test of the structurally important $5850 resistance.

That said, the long-term downtrend is still intact and traders should only consider short-term position even in the case of another leg higher in the counter-trend move. Our trend model is still on sell signals on both time-frames, but above the $4800 level, the short-term trend remains neutral. Initial support is found near $5050, with further levels below that near $4450, $4200, and in the $4000-$4050 zone.

XRP/USDT, 4-Hour Chart Analysis

The short period of relative strength in Ripple’s market is likely already over, as the coin is now back below $0.33, threatening with another test of the $0.32 level despite the generally bullish environment. XRP remains in a hostile long-term technical setup and even in the case of another broad rally, traders should remain defensive towards the relatively weak currency.

Our trend model is still firmly on sell signals on both time-frames, and although the key $0.30 level is in no immediate danger, technicals continue to favor the resumption of the bear market with a likely move towards $0.28 and $0.26. A broad rally in the segment could carry XRP above $0.3550, with further strong resistance ahead at $0.3750.

Ethereum Attempts Rally but Momentum Missing

ETH/USD, 4-Hour Chart

Ethereum spiked higher today in early trading, getting very close to the $180 resistance, and although the previous recovery high is still out of reach, the coil is now close enough to launch a break-out attempt in the coming days. Given the bearish long-term picture, it’s still premature to reenter the market, and traders should only consider short-term trades in the case of a bullish swing, with targets ahead near $200 and $230.

Our trend model is on sell signals on both time-frames, but the line-in-the-sand $160 support level is safe, for now, and even though the bear market is likely to continue, the short-term uptrend is intact. Further support levels are found near $145, $130, $112, and in the $95-$100 zone.

LTC/USD, 4-Hour Chart Analysis

Litecoin continues to trade in a volatility compression pattern, and although it is showing weakness compared to its closest peers, the short-term consolidation pattern is still a bullish formation. That said, the below the key $85-$90 resistance zone, traders shouldn’t reenter the market of the previous leader, as the long-term bearish pressures remain strong.

Initial support is still found in the zone between $72.50 and $75, with further zones near $64 and $56, while above $90 the next major resistance zone is ahead just above the $100 price level and near $110 and $125.

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Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.